How does it work?

What types of projects are eligible for 504 financing?

  • Purchase of existing land and building
  • Purchase of existing land and building, and improvement / renovation of that building
  • Purchase of land and construction of a new building
  • Renovation of an existing building
  • Expansion of an existing building
  • Purchase, installation and relocation of new and used large equipment

Typical Borrowers

Standard Financing StructureNew Business or Limited or Special Purpose PropertyNew Business and Limited or Special Purpose Property

What are considered “special / limited purpose” facilities?

  • Car washes
  • Marinas
  • Farms, including livestock and dairy
  • Gas stations
  • Hotels, motels and lodging facilities
  • Hospitals, assisted living facilities and nursing homes

What is considered a “new business”?
A business that has been in operation for 2 years or less at the time of loan application. A business may also be considered “new” if there is a change of ownership that results in new or unproven ownership or management.

What are the occupancy requirements?

  • For an existing building, the business must occupy at least 51% of the total indoor square footage
  • For a new construction project, the business must occupy at least 60% of the total indoor square footage
  • NOTE: Residential space DOES NOT count toward owner occupied space, even if the business owner lives there

Who is eligible?

Minimum 504 Loan$60,000$75,000$150,000
Maximum SBA exposure per borrower$5,000,000UnlimitedUnlimited
Maximum 504 Manufacture or “Green” per project$5,500,000UnlimitedUnlimited


What types of businesses are eligible?

  • Tangible net worth (retained earnings) must not exceed $20,000,000
  • After tax net income must not exceed $6,500,000

What is eligible?

What costs are eligible for financing?

  • Cost of land and building
  • Furniture & Fixtures, up to 10% of total project cost
  • Soft construction costs including landscaping, telephone and security systems, parking lots, demolition costs, etc.
  • Professional fees including appraisal, environmental, title work, construction draws, engineering costs, architectural costs, surveying, utility fees, etc.


What types of projects and costs are NOT eligible for 504 financing?

  • Franchise fees
  • Working capital
  • Start-up costs
  • Inventory
  • Improvements to space being leased to a tenant
  • Improvements to space being leased to the business (business is a tenant)
  • Purchase of stock, goodwill, company name, customer lists, blue sky
  • Non-profit entities
  • Investment property
  • Residential property
  • Real estate commissions
  • Bank fees
  • Vehicles- anything with a VIN (trucks, cars, semis, rolling stock)
  • Boats and airplanes

Fees & Terms

What are the available debenture terms?

  • 10-, 20- and 25- year terms for real estate and equipment
  • Terms are subject to the remaining useful life of the loan collateral as determined by appraisal or manufacturer of equipment


Monthly fees included in effective rate
CDC Servicing Fee (RDC)0.625%
CSA Servicing Fee (Wells Fargo)0.100%
SBA Servicing Fee0.368%
Upfront fees financed with SBA debenture
CDC Processing Fee (RDC)1.50%
SBA Guarantee Fee0.50%
Funding Fee (Wells Fargo)0.25%
SBA Underwriters Fee0.40%
CDC Attorney Fee$1,800


Out of Pocket Fees
Application Deposit (RDC)$1,000
Bank Participation Fee (SBA)0.50%

504 Loan Timeline

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Contact us to get more info to see if your business is right for a 504 loan. Lets get the ball rolling, one of our loan officers will be in touch with you shortly:

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